Hi Leanne_68,
as of yesterday I have updated macOS to 11.2 and tried again. Both devices are signed into the same Apple ID with 2FA, both are on the same Wi-Fi network with BT and Handoff toggled on. I have also tried restarting both devices. Because I have read through other questions pointing out the same issue I have also tried resetting the network settings on the iPad, pairing both devices on Bluetooth manually, then forgetting them again as these measures did not resolve the issue.
What is strange is that on the very first day I have booted the new Mac mini Sidecar did work with my iPad. I finally started iCloud Drive with Documents and Desktop sync after I had transferred my local files from the old Mac mini (late 2014, i7 3.0 GHz) over the network to the new local storage on the M1 machine. From then on the problem with Sidecar showed up. So I logged out of iCloud altogether, logged back in, had to resync the whole iCloud Drive Document and Desktop folders (which took ages), still the Sidecar timeouts persist.
Thanks for looking into this, I am really upset that on the newest combo I have ever owned from Apple I now have to face a downgrade of features which bothers me even more when I compare the performance of the new M1 chip to that of the old Intel’s.
Kind regards.